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ABN Amro Q1 profit strong, seeks to restore confidence after pay outcry

[AMSTERDAM] ABN Amro, the state-owned Dutch bank, posted its highest profits in four years on Wednesday, but said it would take a long time to restore confidence after a public outcry over salary grants to senior management delayed its reprivatisation.

The bank, which was nationalised in a 24 billion euro bail-out 2008 at the height of the global financial crisis, reported first-quarter underlying profit of 543 million euros (US$610 million), a 52 per cent improvement on the year before.

But board chairman Gerrit Zalm said in a statement the bank had much work to do in regaining public trust after the uproar following its since-shelved decision to grant pay increases of up to 100,000 euros to the bank's top management. "We sincerely regret the increase in fixed salary and the impact it has had on ABN Amro, our clients and employees, and other stakeholders," he said. "We understand it will take time for the public to regain confidence." The listing, which had been due to be announced in March, could face further delays due to political uncertainty that has threatened to bring down the government of liberal Prime Minister Mark Rutte.

A decision on the listing sits with Finance Minister Jeroen Dijsselbloem, who said last month he would decide on the matter once the pay dispute had been resolved, saying "calm" was needed around the bank before moving ahead.

A majority of parliament, which must approve a listing, is opposed.

In its quarterly report, the bank painted an optimistic picture of the Dutch macroeconomic environment, pointing to a gradual improvement in the housing market, which was hit by the financial crisis, damaging ABN Amro's balance sheet.

It reported a 14.1 per cent return on equity, up from 10.9 per cent the year before. It had client assets of 322.2 billion euros, up from 302.5 billion at the end of 2014.